Thousands of jobs to be lost in Tata-Thyssenkrupp merge

Tata Steel, the parent company of the steel plant in IJmuiden, and the German ThyssenKrupp are merging their European Steelworks. The two companies expect that the merge will result in the loss of 4 thousand jobs throughout Europe, they said in a joint statement, AD reports.

Half of the jobs will be lost in the production branch and the other half in the administrative branch. The job losses will be distributed evenly across the two companies. The consequences for jobs in the IJmuiden plant, were not specified.

Together the two companies' annual sales amount to 15 billion euros, and they employ about 48 thousand people in 34 locations. The headquarters for the joint venture will be located in Amsterdam.

In the first years after the merger, the companies expect to save money by combining the research departments, the sales departments and their purchasing. This is expected to eventually lead to annual cost savings of between 400 million and 600 million euros.

The companies hope to sign the final deal early next year, and complete the merger by the end of 2018. The merger is still subject to approval by the relevant authorities.

Tata and ThyssenKrupp have long been discussing merging their European steel divisions. The merger met with a lot of resistance, due to the fear of large-scale job losses.

The staff at Tata Steel in IJmuiden are not happy about the proposed merger, according to the newspaper. In view of the currently available information, "all signals are on red" in IJmuiden, Frits van Wieringen, chairman of the Central Works Council said to AD. The trade unions promised to do everything in their power to prevent forced redundancies.

Employers organization VNO-NCW considers the Amsterdam headquarters to be a boost for the Netherlands. According to chairman Hans de Boer, the headquarters will bring high-quality jobs and an important decision-making center to the Netherlands. It is alo "recognition of the good Dutch business climate", he said, according to AD.

Prime Minister Mark Rutte also considers the Amsterdam headquarters good news for the Netherlands, he said on Twitter. "Good news: Tata Steel and ThyssenKrupp are establishing headquarters of their joint venture in Netherlands and continue their efforts in IJmuiden", the Prime Minsiter tweeted. "This reinforces Tata Steel IJmuiden's leading role as one of the most efficient and sustainable steel factories in the world."